Stock markets on both sides of the Atlantic held steady on Monday as cautious investors eyed the upcoming US midterm elections, the resumption of Washington’s sanctions on Iran and brewing fiscal fears in Italy.

Wall Street stocks finished mostly higher on the eve of the key vote, with the Dow and S&P 500 both notching solid gains, even as the Nasdaq pulled back.

The mixed-bag session on Wall Street suggested investors were selling off high-flying technology stocks and reallocating the funds to sectors that haven’t performed as well, including banks and health companies.

In Europe, London’s FTSE 100 ended the day with a small gain, while in Paris the CAC 40 was flat and the Frankfurt DAX 30 dipped 0.2 percent.

Eurozone finance ministers on Monday urged Italy to reverse course on its rule-breaking budget amid fears of market turmoil and a return of the debt crisis.

‘WORST CASE SCENARIO’ FOR MARKETS

Traders are now eyeing Tuesday’s US elections, which are seen as a referendum on President Donald Trump’s performance since taking the White House.

As the midterm election campaigns headed into the final hours, most experts expected the Democrats would win the House of Representatives, while the Republican party would hold onto control of the Senate.

“There is the assumption of the markets that Democrats will take the House and Republicans will maintain control of the Senate,” said Sam Stovall of CFRA Research. “It does not worry them.”

Analysts do not expect that outcome to undo Trump’s tax cuts or regulatory rollbacks but the White House would face much more scrutiny as far as congressional investigations.

Briefing.com analyst Patrick O’Hare said the election could produce some volatility but the real factors moving the markets are elsewhere.

“Pay attention, but don’t let the knee-jerk responses distract you from this important point: the hurdles for the stock market are rising interest rates, the trade tension between the US and China, and the slowdown in foreign economic (activity), all of which are a headwind for earnings growth,” he said.

Oil prices finished mixed as Washington reimposed sanctions on Tehran, although it also exempted China, India, Japan and 5 other countries that still source significant amounts from Iran.

“Washington chose oil market stability and geopolitical relationships over exerting ‘maximum pressure’ on Iranian exports,” Eurasia Group said in a note.

But with Iranian banks now cut off from the SWIFT international banking transfer system, doing business with Iran has become more difficult.